Charles A. Ballard - Page 1

          T.C. Memo. 1996-68                                                          


                               UNITED STATES TAX COURT                                


                          CHARLES A. BALLARD, Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 10333-94.              Filed February 20, 1996.             


                    B is an S corporation involved in the business of                 
               yacht chartering.  P, the sole shareholder of B,                       
               claimed losses passed through from B.  R disallowed P’s                
               losses on the ground that B’s activity was not engaged                 
               in for profit.                                                         
                    1.  Held:  B’s yacht chartering activity was not                  
               engaged in for profit within the meaning of sec. 183,                  
               I.R.C.                                                                 
                    2.  Held, further, sec. 6653(a), I.R.C., addition                 
               to tax is not sustained against P.                                     
                    3.  Held, further, sec. 6661, I.R.C., addition to                 
               tax is sustained against P.                                            


               James S. Kaplan, for petitioner.                                       
               Moira L. Sullivan and Paul T. Muniz, for respondent.                   






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